Financial Markets & their Instruments

By: Sheeza Ashraf

Money Market ´A segment of the financial market in which financial instruments with high liquidity and very short maturities are traded´ .

Capital Market ´A capital market is a market for securities (debt and equity). where business enterprises (companies) and governments can raise long-term fundsµ Capital market New issue market [NIM] Underwriting Initial public offering [IPO] Primary Secondar y .

4. 5. 2. 6. Treasury Bills [T-Bills] Certificate of deposit [CD] Commercial paper Banker·s acceptance [BA] Re-purchase agreement [Repo] Federal Funds Municipal notes .Money Market Instruments 1. 7. 3.

1. Treasury Bills .

Certificate of Deposit .2.

Commercial Paper .3.

Banker¶s Acceptance .4.

Repurchase Agreement .5.

6. Federal Fund .

Municipal Notes .7.

Mortgage . Bonds o Fixed rate bonds o Floating rate notes [FRNs] o Zero-coupon bonds o Inflation linked bonds o Perpetual o Bearer o Treasury bonds 2.Capital Market Instruments 1. Debentures 4. Stocks 3.

Bonds .1.

2. Equity Equity Common Preferred .

3. Debenture .

Mortgage .4.

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